What You Should Know About Alexion's $1.4B Proposed Buyout Of Portola Pharma

Large-cap biopharma Alexion Pharmaceuticals, Inc. ALXN announced a deal Tuesday to buy its small-cap peer Portola Pharmaceuticals Inc PTLA. The news comes after two M&A announcements Monday in the biotech space.

The Alexion Deal Terms

Alexion said it has entered into a definitive agreement to acquire commercial-stage biopharma Portola for $18 per share in cash, or about $1.4 billion in total.

The offer price represents a 132% premium to Portola's closing price of $7.76 Monday.

The merger is to be effected through a tender offer by a subsidiary of Alexion to acquire all outstanding Portola shares.

The deal has been approved by the boards of both companies. The companies expect the deal to close in the third quarter of 2020.

Alexion said it will fund the transaction with its cash on hand. As of Dec. 31, 2019, Alexion had cash and cash equivalents of $2.69 billion on its balance sheet. The proposed acquisition will place at Alexion's disposal Portola's cash balance of $215 million, net of debt.

The Alexion Deal Logic

Alexion sees the deal adding near-term diversification to Alexion's commercial portfolio.

Portola's commercial product Andexxa, which is also marketed in Europe as Ondexxya, is the first and only approved Factor Xa inhibitor reversal agent. It is found to rapidly reverse the anticoagulant effects of Factor Xa inhibitors Xarelto, marketed by Johnson & Johnson's JNJ Janssen unit, and Eliquis, marketed by Bristol-Myers Squibb Co BMY and Pfizer Inc. PFE.

"By leveraging Alexion's strong operational and sales infrastructure and deep relationships in hospital channels, we are well positioned to expand the number of patients helped by Andexxa, while also driving value for shareholders," Alexion CEO Ludwig Hantson said in a statement.

In premarket trading Tuesday, Portola shares were advancing toward the deal price, trading 130.54% higher at $17.89. Alexion was slipping by 2.73% to $101. 

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